Accountancy students, the online accountants of the future, are feeling confident about their future employment prospects despite the constrained jobs market and tough economic climate, according to a study carried out by CIMA.

The Institute found that more than 90% of CIMA students are confident that their job is secure, at least for the remainder of 2011. Furthermore, 60% are optimistic enough to think about changing jobs within the next couple of years.

CIMA accountants expect their salary to rise by 6% over the next two years, despite wage inflation in the UK currently just 2%. The majority of students who responded to the survey think we’ve seen the worst of the cutbacks and 27% believe hiring will increase this year.

David Rowsby, CIMA’s regional director for Europe, said finance students are confident that they have strong qualifications which have a unique focus on business. With economic uncertainty continuing in many parts of the world, students think a professional accountancy qualification from CIMA is the best way to forge a career in the global environment, he added.

The survey also found that 57% of accountants in the UK are happy with their salary, but more than 50% of respondents expect to receive an increase within the next 12 months.

The high level of confidence in job security amongst accountancy students may well be justified as demand for qualified finance professionals soared last month.

According to the Reed Job Index, demand for qualified accountants registered 134 last month, compared to 127 the previous month. However, in real terms, salaries have dropped since December 2009 registering 98 – 2 points under the 100 point baseline.

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Analyst firm Gartner has predicted that a lot of businesses will concentrate on revising their privacy policies next year in the wake of ever-advancing technology.

The firm expects more than 50% of companies to tweak, or update, their existing policies to fit new regulations and the increased threat of cyber crime. Data breaches will more than likely be at the forefront of many privacy officers’ minds, Gartner suggests. However, it went on to say that the majority of companies should have adequate controls in place already and should only need to devote around 10% of their time to data security issues.

The second most likely area for privacy officers to focus on is location-based services such as cloud computing. The remote nature of these services makes them at odds with privacy. Another task will be to evaluate and create a process for determining the sensitivity of different sorts of information, but as with data security, once a process is established, it should only take around 10% of people’s time to maintain.

Finally, Gartner warns privacy officers that they must take the ever-changing regulatory environment into consideration and ensure they adjust company policies without getting too distracted by the changes.

Meanwhile, Stuart Hibbert, the chief executive of icomplete.com, has been extolling the benefits of cloud computing services. He explained that the cloud can provide businesses with low cost, high levels of functionality.

The biggest benefit of taking to the cloud is that you don’t need to buy your own servers, set the system up or back it up at the end of the day. It’s available 24/7 at a very small price. Hibbert also claimed that businesses will see increased productivity if they move to the cloud because users spend less time chasing people up.

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The Chartered Institute of Taxation says there are a significant number of issues that need to be addressed before HMRC can implement the tax agent strategy.

The Revenue recently published proposals that would allow authorised tax agents, including some online accountants, to use a self serve system allowing them greater access to its systems. Under the scheme, advisors that had already enrolled would be able to amend PAYE codings and change addresses themselves.

Whilst the initiative has been welcomed by many in the profession, the CIoT and the ATT have said that there needs to be an independent body overseeing the disenrollment and suspension of advisors. Around 1,500 members of the CIoT contributed their views and they highlighted concerns over data security and the additional burden a self serve system could put on the advisors.

The president of the ATT, Andrew Meeson, said there needs to be further clarification over who will be able to access self-serve. A lot of people feel that unrepresented individuals should have some access. We also need to receive some reassurance about data security within the Revenue’s systems if all agents have access. Professional agents will not want to take part in the system until these issues are resolved, he added.

Anthony Thomas, the CIoT’s president, went further saying tax advisors are not going to be interested in self-serve if it forms part of an unpalatable package which will cause problems later.

The closing date for responses to HMRC’s consultation on the tax agent strategy is September 16th.

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Owners of small firms should always keep their customers in mind when they think about putting their business online, according to the founder of KKSmarts, a web promotion company.

Mike Seddon said that some firms lose sight of important things when they have a website created. The two questions they should always ask themselves are, why the website is being created and who it is being targeted to.

Well known brands will want to have the highest ranking on their brand name, whilst competitive tradesmen, such as electricians and plumbers, will want to rank highly for trade related phrases.

He went on to say that firms seem to lose sight of reality and think they will reach the whole world, rather than thinking where the customers are and how they will search for what they want on the Internet.

As well as falling down in the website design stakes, small businesses and online accountants are not leveraging the power of social media efficiently.

IFF Research’s SME Omnibus study shows that only 5% of small business decision makers use and fully exploit Facebook as a marketing tool. 18% think LinkedIn is an effective sales generating tool, but only 3% take advantage of all of its features. Twitter fares no better with figures of 17% and 4% respectively.

Mark Speed from IFF Research commenting on the findings said that social media is not necessarily the right set of tools for every business, but there seems to be a big divide between those who think it is effective for lead generation and those who actually take advantage of it.

He went on to point out that there are simple ways to engage online with customers, such as updating a company website with information that will appeal to its readers. However, the study showed that of the firms with a website, 16% update it at most once a year.

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Leading lawyers said recently that the 50% income tax rate did not cause the exodus many people had predicted.

David Jervis, head of tax at Eversheds, the international law firm, said he was actually not that surprised. The 50% tax rate is referred to as a temporary measure and the Chancellor and other senior coalition members back this up.

The expectation that the top rate will not remain with us for long, plus the inconvenience incurred by taxpayers such as online accountants in relocating and London’s position as a world leading financial centre, could have helped to close the migration floodgates for the moment.

However, Danny Alexander, the chief secretary to the Treasury, has said that people seeking the abolition of the top tax rate are “living in cloud cuckoo land”.

Boris Johnson, the Mayor of London, and Lord Lamont, a former Chancellor of the Exchequer, recently called on the government to abolish the 50% tax rate.

The Lib Dem minister defended the government’s plan for economic recovery and said we had a long and difficult road to travel down. He went on to blame the global economy for the sluggish economic growth the UK is currently experiencing. Increased commodity prices and the soaring price of oil were major factors to blame for the dire state of the British economy, he said.

Alexander also claimed that when it comes to tax cuts, the coalition would prioritise reducing the burden on low and middle income people who are struggling to make ends meet.

Mr Alexander’s claims came after Norman Lamont said the lame excuses such as the Royal Wedding and the Japanese earthquake were to blame for sluggish growth were politically inspired.

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You probably hadn’t noticed but I tend to write quite a lot about the faceless hordes that we affectionately refer to as Hector. Yep, our friend the taxman. Not my favourite person, although, perhaps grudgingly, you have to accept that they are merely doing their job and the real problem is the hopelessly complicated mare’s nest of tax law they are trying to implement. Which is down to a series of inept politicians (isn’t that a tautology?), not least one particularly dim specimen of the breed.

But now it’s getting personal.

I mentioned last week that I’m being chased for a CT bill that was paid, in full and on time. I just checked my online account again and it’s gone up, since they are adding interest to a debt I don’t actually owe. Nor have they responded to my accountant’s attempt’s to find out what’s happening. And the really worrying part is that aspect enquiries are usually triggered by non-payments and poor returns, so not only do they owe me money but I am waiting or another letter where they will offer to look over my records and make sure all is in order.

And then to add insult to injury, I managed to overpay my PAYE last year. Not by any great amount, and I’m still not sure how we managed it – most likely a side effect of restarting a payroll after a 14 month break, not that I really care that much – but the accountant wrote to them to tell them somewhere around last September.

Nothing happened. Gosh…

But today I get a letter from Hector (to be précis, a D. Wrightson) Form P35D, Overpayment Review. Page one is the exact same calculation my accountant sent them last year. Bottom right hand corner is the box “Apparent Overpayment”.

“Apparent”? Are your accounting systems that pitiful that you don’t actually know? Does my accountant telling you the precise amount not indicate that just perhaps it actually is a real honest-to-God overpayment?

Anyway, I have to fill out page 2 of the form. A list of things I may have got wrong. (Hint: none of them). A tick list of which one is actually incorrect. ( Guess what?) And then the last option, “I confirm the return is correct. My explanation is as follows”. Say what? You owe me money, and I have to explain to you why I overpaid you else you won’t give it me back?

And the last sentence is a lulu. Basically “Once I have received your reply, I will make any necessary adjustments and if necessary arrange for any payments to be offset… “

Hey, it is bloody necessary, it’s my money and I don’t want to offset it against anything, I want it back in my bank account where it belongs.

Let’s be clear about this: HMRC is not a service, even at the pitiful level they manage to achieve, it’s a tax collection agency. The only money that is theirs is the amount they are owed. Everything else in excess needs to be paid back, quickly, since it’s not yours and I would rather I got the interest than you. Oh yes, just to add insult to injury, there is no hint of interest being added. Hell no, they only charge that on money they aren’t owed, not on money they do.

Earlier this week a Parliamentary committee had some critical things to say about HMRC’s performance, or rather lack of it. Nice to know they’re keeping up with reality, isn’t it…

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Sage published research findings last week showing that 76% of SMEs have no knowledge of the proposed alterations to PAYE Real Time Information.

Since PAYE was introduced in 1944, very few changes have been made to the system. Under Real Time Information, employers and online accountants will need to give HMRC information for National Insurance, PAYE and Student Loans each time they run a payroll, rather than at the Payroll Year End. If companies understand the way this will impact their operations, they will be able to minimise the impact by preparing in advance.

There are various different payroll providers in the UK and they offer different products and levels of support. It is not mandatory for providers to include the new changes within their software so the onus is on business owners to ensure they have the correct procedures in place.

Neilson Watts, from Sage’s Small Business Division, has advised small business owners to contact their payroll provider if they are unsure how the changes will affect them.

A lot of people have expressed concern as to whether HMRC is ready to implement such a large change after the disastrous logjam last year when the department migrated PAYE records to a new system. However, the National Audit Office says the Revenue has made significant progress towards improving its administration of PAYE.

HMRC still has a lot of work to do if it is to complete stabilisation by 2013 but this work is key to the introduction of RTI. Once RTI is in place, there will be an increase in the number of in-year amendments to PAYE records and this could lead to further data quality challenges.

The report also said that HMRC must define its PAYE operating model, explain how it will transform it to fit the RTO environment and test its implementation plans.

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Savers and online accountants who have been hoping to see the Bank of England’s MPC raise interest rates sooner rather than later will be dismayed to learn that the Institute of Directors has said there is no case for rates to rise this year.

It said that it would be an unprecedented move to raise rates when the broad money supply was not experiencing double digit growth. Furthermore, a rise now could plunge the UK back into recession.

The BCC and the CBI both supported the decision to keep the base rate at its historic low 0.5% at the last MPC meeting.

David Kern, the BCC’s chief economist, said the MPC was right to keep the base rate down in order to help the fragile economic recovery and relieve some of the pressures both individuals and businesses are currently facing.

He went on to point out that the MPC is concerned about the current high rate of inflation and the prospect that it may rise further in coming months. However, it would be a major mistake to tighten policy at this stage. Increasing the base rate prematurely could damage economic growth and lead to more redundancies.

He added that the MPC could consider increasing the quantitative easing programme if the economy were to weaken any further.

The CBI’s chief economic adviser, Ian McCafferty, said the MPC was in a difficult position and will have to draw a fine balance over the coming months. However, he feels that if inflation reaches 5% by the autumn, the MPC might consider a change of policy before the year ends.

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Compared to business owners in other countries, Britons are among the most pessimistic, according to research by Grant Thornton.

The bad news is, this could include online accountants!

The International Business Report for quarter 2 shows that optimism amongst UK companies has dropped 9% year-on-year, and 14% since the first quarter of 2011. The Report looks at the views and expectations of over 11,000 companies in 39 economies.

UK business optimism is higher only than Japan, Spain and Greece, countries that have suffered severe financial or environmental upheaval. The downturn in the UK is linked to concerns over the economy due to the drop in consumer spending, weak bank lending and the decent demise of some high-profile retailers.

Companies in the UK expect their profits to decrease as well as their ability to invest in plant and machinery and R&D. Despite that, UK firms do expect their revenue to grow by 4% and their workforce by 7% in the next 12 months. 53% of businesses also expect to award a pay rise in the coming year.

The CEO of Grant Thornton UK, Scott Barnes, said that although this report paints a bleak picture, it’s important to realise that there are some positive signs. Overall business optimism around the world has increased over the last 12 months and governments and international organisations must build on this and make credible decisions.

However, UK businesses could be in for a tough time as employee disengagement rises and many employees start to look for new jobs.

Research from Mercer shows that only 61% of employees get a feeling of personal accomplishment from their job, compared to 70% 4 years ago. 55% said they are proud to work in their company and 52% are committed to their organisation, down from 60% and 59% respectively in 2006.

36% of respondents said they were seriously thinking about moving on and 40% of them were in the 25 to 34 age bracket. The main reasons behind this growing dissatisfaction are salary freezes and cuts to benefits and training.

Employers should be worried that so many key employees are disenchanted, especially as they are an integral part of recovery plans.

Chris Johnson from Mercer said there is a general malaise in the workplace which can undermine business performance. Mercer’s head of employee research for EMEA added that employees now tend to take more self-interested view and if their expectations are not met, they take action to do what is best for them.

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There are growing concerns amongst finance professionals that the government’s plans to exempt small businesses from filing accounts with Companies House might backfire.

Under new proposals, firms with an annual turnover less than £88,000 will no longer need to file statutory accounts, but experts believe this could make it harder for them to get access to trade credit. The Institute of Credit Management’s chief executive, Philip King, said suppliers rely on financial information when deciding whether or not to extend credit terms. If micro-firms do not need to file accounts, suppliers are unlikely to give them credit.

He thinks that businesses should provide more information rather than less and that rather than encouraging growth, the government’s new proposals will restrict it.

Graydon, the credit reference agency, recently conducted research that found that only 8% of businesses would extend credit if they did not have access to a company’s financial information. Martin Williams from Graydon said that most suppliers admitted they would not grant credit or finance to a small business unless its financial information was available.

He went on to explain that this is not the solution to reducing the red tape problem and there is a danger that it will actually increase the administrative burden on SMEs if they have to answer financial questions directly from trade suppliers.

A lot of entrepreneurs were no doubt relieved when the EU agreed to exempt micro-businesses from filing some reports with Companies House. Ed Davey, the business minister, said this was a significant step forward in the battle to reduce red tape. However, businesses would still have to file simplified information at the government’s discretion.

It has not been decided whether the UK coalition will actually adopt the new rules and in the meantime, financial experts hope they can convince the government that they will do more harm than good.

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The Chartered Institute of Management Accountants has urged contractor accountants to embrace web 2.0 solutions to enhance their offerings.

The CIMA says that online accountants must use social media tools to streamline their business processes if they are to improve accounting practices. As the organisation recently discovered, very few accountants use social networking on a regular basis, but those that do reported that their effectiveness improved.

Web 2.0 technologies improve coordination, provide greater accessibility to knowledge and build up team relationships but accountants find it difficult to quantify these benefits.

CIMA’s R&D manager, Naomi Smith, pointed out that the younger generation of accountants are suing modern technologies to a much greater extent than their older counterparts. But she pointed out that all accountants should be taking advantage of the opportunities provided by social networking tools. Web 2.0 offers new ways of communicating with business colleagues, especially those based far away.

She went on to say that using these tools empowers employees to take more responsibility for organising business processes, knowledge and workplaces.

It seems strange that accountants are reluctant to use these new tools. Social networking sites, such as LinkedIn, are great places to capture new business through referrals. As we emerge from the recession, contractor accountants may want to expand their client base. And social media is an excellent way to do this.

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Dave Hartnett, HMRC’s permanent secretary for tax, recently confirmed that the taxman’s approach of targeting specific professions has raked in vast amounts of previously unpaid tax.

He said the Revenue has had great success by targeting people, including the clients of some online accountants, with offshore bank accounts and targeting sectors, like the medical profession, has been very fruitful.

The latest tax amnesty has been aimed at the plumbing sector. HMRC offered lower penalty rates to those willing to declare unpaid tax. The Revenue has also set up task forces to investigate London’s restaurant trade and these will soon be rolled out across the entire UK.

Contractor accountants with clients in the restaurant trade may want to encourage restaurant managers to get up to date with their record keeping. HMRC will expect to see till rolls, cheque stubs and records of sales and takings. The taxman is also likely to take an in-depth look into gratuities received by waiting staff. Tips are often undeclared but as the Revenue toughens its stance on cash payments, waiters could find themselves in the spotlight.

£917 million has been ring fenced to tackle tax avoidance, tax evasion and fraud this year and the Revenue hopes to claw back £7 billion every year within 4 years.

HMRC is also planning to launch an initiative to catch individuals and businesses who have not registered for VAT.

The scheme is due to start in the summer and the Revenue is already having discussions with interested parties. Mike Wells, the director of risk and intelligence at HMRC, said the department wants to gain as much insight as it can into the opinions of people and organisations so it can implement these into the campaigns it designs for its customers.

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